Will digital tipping become cryptocurrencies first real-world use case?
During the high tide that was 2017, when Bitcoin and Ethereum knew no limits, its growth coincided with an explosion of cryptocurrency based projects which were all looking to raise funds with the help of this new hybrid capital sourcing strategy called an ICO.
No name tech companies and startups from across the globe were raising millions in a matter of weeks without having to pitch in front to Angel Investors or VC’s and signing away a percentage of their equity.
This access to global funding was unprecedented and inspiring, to see a community come together and support projects but the real issue was the problems these projects were aiming to tackle. While it seemed great in theory when it came down to the practical implementation many of these cryptocurrency projects failed to deliver a viable MVP that could compete or disrupt markets.
Cryptocurrency and blockchain is still a highly speculative asset with very few practical use cases that can compete with centralised solutions currently available. While I have no doubt, these projects will be constrained by the limitations brought on by the scalability trilemma I do think that cryptocurrency needs to find a sector where it can consistently provide real-world value and use.
Since the bear market hit, talk of cryptocurrency has gone quiet with many projects going back to the drawing board and working on limited budgets. I do however see an opportunity for cryptocurrency to grow in a sector that has been grossly under-serviced by current options.
Paying for content, curation and engagement
The internet has long been perceived as a place where any user can gain access to information for free, and while this concept is an admirable one and one we should look to strive for in future, it is not a model that can continue to scale.
Having an internet publication or being an online content creator doesn’t come without expenses and to this point operating costs were covered either by sponsored content, advertising monetisation, investment and lastly donations.
Peer to peer tipping
Peer to peer tipping or donations relies a lot on the good nature of man and a high level of altruism since you as the creator push out your content and hope that a portion of those who value your efforts will reward you for it.
While this is the purest form of tipping and translates nicely from real life practices the problem with tipping in cryptocurrency at the moment is the fact that many investors at this point still want to HODL in the hope of making short term returns instead of trying to use their currency regularly to trade.
A self-publishing site content site that seems to favour this principle and allows users to tip content creators in Ethereum is already in the works. You can see it play out on a website called, Cent — https://beta.cent.co/.
Tipping from a reward pool
To get uses used to handing out digital tips without having to give out there own money some sites are trying to give its users power of the money it earns and helping distribute it through a central reward pool.
A self-publishing site content site that seems to favour this principle has released and allows users to tip content creators in Ethereum based token called Bounty (BTNY). You can see it play out on the site, Publish0x — https://www.publish0x.com/.
Tipping from a stake reward pool
Stake based rewards allow investors to purchase and hold an amount of cryptocurrency which gives them relative access to distributing currency from the reward pool.
So while your stake is safely locked away, you get access to an amount based on how much stake you hold. You can then use your allocated reward pool access to tip other content creators.
A self-publishing site content site that seems to favour this principle has released and allows users to tip content creators in the blockchains native currency STEEM or SBD (STEEM backed dollars). You can see it play out on the site, Steemit — https://steemit.com/.
While the methods I’ve mentioned above are limited to one site some communities are looking to provide cross-platform crypto-based tipping initiatives on sites like Twitter, Reddit and Discord with the use of DogeCoin, Reddcoin or LikeCoin.
Free internet services or free the internet of monopolies
While I’m personally not sure which tipping method is the best or if it needs to be a combination of tipping and direct donations that will be the winning formula, I do think this is a step in the right direction for the internet as a whole.
Just as we are used to paying for information in the real world via books and newspapers, we need to transition this behaviour onto the internet. If we do not, we will continue to give more power to these free information aggregators like social media giants Facebook, Twitter and YouTube.
This will only strengthen their monopoly and allow them to dictate the narrative towards there benefit, it’s filters and biases will also go so far, and we’ve seen the dangers the echo chambers these sites create as well as the ease of manipulating their systems with the rise of fake news.
If we are going to demand the right to enjoy high quality, fact-checked original content we will need to pay for it, and with cryptocurrency, it gives us a universal method of rewarding those who take the time to produce good content.
Content can then be rewarded on merit and not by the number of views and ad impressions it gets, eliminating the need for click bait strategies and another unscrupulous journalistic behaviour.
The tip of the iceberg
While cryptocurrency still looks for a place to achieve scale and mainstream adoption tipping could be the one area that it can take a foothold. It has been neglected by centralised services and is by no means a monopoly at this point.
I think that the growing need for independent, unbiased content and the tipping trend can be combined with cryptocurrency and could be the springboard the sector never wanted but needs to become a viable mainstream trading medium.
About the author
Che is a Cape Town based tech enthusiast and digital marketer and blogger by trade with a keen eye for cryptocurrency and emerging tech trends. He is also the co-founder of nichemarket, A South African online community designed to promote local entrepreneurs, SME’s and startups.